Debt Ceiling Impasse Threatens Safety of Money-Market Funds

Money-market funds are popular investments for those seeking secure places to keep cash, but the US government's failure to raise the debt ceiling poses risks to these funds.
If the debt ceiling is not raised, the government could default on its debt, damaging the value of the securities in which money-market funds have invested.
Investors often view money-market funds as very low-risk, so a default could undermine their confidence in and adoption of these funds.
The government has warned it will run out of cash in early August if the debt ceiling is not raised, putting money-market funds in danger if Congress does not act.
While the debt ceiling has been raised many times before, partisan disagreements mean raising it is not guaranteed, threatening the safety and popularity of money-market funds.